Uh oh, the falling birth rate signals a recession ahead

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Over the years, it has been well observed that the birth rate falls when the economy turns down

The stock market? Bond yields? Commodity prices? Business investment or trade flows? Perhaps even the length of women’s skirts? There are lots of different indicators that economists and stock market pundits have developed over the years to predict recessions, some serious and others less so. But here’s one no one has noticed before. The birth rate.

Over the years, it has been well observed that the birth rate falls when the economy turns down. As incomes get squeezed, couples put off having that next baby. But according to a fascinating new paper from the National Bureau of Economic Research there is something else going on as well. The birth rate turns down before the recession – not after....